Why Should We Trade Options

Jyoti Bansal (NCFM,NISM Certified Technical Analyst & Investment Adviser )
A free video tutorial from Jyoti Bansal (NCFM,NISM Certified Technical Analyst & Investment Adviser )
"A Mission For Financial Confidence”
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Options Trading MasterClass: Options With Technical Analysis

Options Trading+++Strategies , Options Basics & Greeks (A 3-Course Bundle) For Stock & Day Trading By Technical Analysis

07:48:48 of on-demand video • Updated November 2020

  • Learn to make money by trading in Options with Technical Analysis
  • Learn the Basics of Options
  • Learn the Benefits of Trading Options
  • Understand the calculations for different Options Strategies
  • Understand and learn trade set up conditions for different options strategies
  • Understand and Learn to apply the Basic to Advanced Options Strategies
  • learn to create your own optimum Strategies according to risk profile
  • Learn how to make Options Spreads and know the Right time to execute them
English [Auto] Welcome back. Now in this lecture we will discuss why should we do options options have become remarkably popular. But the concept of option is still treated with fear options is a wonderful tool to limit our risk and maximize our return. If you structure your plan and follow it every time. There are many ways to make money with options trading that you learned throughout this call. But in this lecture we will learn why should we trade options. There are so many benefits of creating options. Options can be used to manage risk generate income. Pick a one page off leverage and make money not. Almost any market condition so let's understand the benefits one by one. Options enables us to control more asset for less money. Let's take an example of realistic. Assume that you want to buy a house that is selling for 100 ghee and you want the right to buy that house within the next three months. So instead of buying the house directly by paying hundred gay you instead pay only five K and by paying five thousand dollar you get the right to buy the house at any time during the lease term of three months. It means now by paying only five thousand dollar you have the right to party the house at hundred thousand dollar even if the house price rises during this period. And the owner of the House will collect 5000 dollar on the contract and he is obligated to sell the house at the agreed price. Even if the house value rises. Now if house price decline to 90 K from hundred gay you are not obligated to purchase that house. And in this case the seller profits by the 5000 thousand dollar that he collected at the execution of create the five thousand dollar collected represents the maximum profit of the seller. Now in case 2 if house prices rises to 120 gave from hundred K in next to ones due to some news you may be able to sell the right to choose the house to a third party at fifteen thousand premium enabling you a gain of ten thousand dollar so by paying only five thousand dollar your net profit is ten thousand dollar and it is a two hundred percent return. Now in this example the seller owns the underlying asset that is the house but an option stating the option seller commonly doesn't own the stock. So this was the most simplest example of options buying and selling. Let's take an example. All stock options. Suppose a busy dog is trading at 30 dollar an option to buy one contract. ABC might be placed at three dollar the goal is one contract. The present hundred years. It is different for different stocks in India. But typically one contract the present hundred year. So the total cost of one contract will be three in two hundred equal to 300. But if you buy a hundred years of ABC company you would have to be a border town of two thousand dollars. So in this example you can buy ABC quote option for around 10 percent of the stock price in order to control 3000 of ABC stock until the expiration date options enables us to trade with leverage because our to biases are so low. Hence our personal favorite done can be so much greater options also enables us to trade for income because we design different strategies for the purpose of generating income on a regular basis. Options gives us ability to make profit from declining stock you can use puts and calls to ensure that you can make money even if stock goes up down whole side of these options enable us to reduce our risk of trading and in certain great cases we can even eliminate risk by giving very little money in the form of premium. For example if I buy a stock we have an unlimited risk of declines but with the help of options we can eliminate that risk. So with all of the different benefits of options why would you not be curious to learn more about options strategies options trading can be a jelling because they are reasonably complex instruments to understand but it's my job to make it learn as simple as possible for you after you are or that they may become more and more fascinating and as soon as you go through the course it will become more clear and simpler. When you are creating option strategies. So if you want to take all the benefits of option stating let's get started.